Teradata Msi Presentation

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    CRM Power Tools for Business Results

    Intelligence-Based Marketing

    Peter HeffringPresident

    CRM Division

    All rights are reserved. Members of MSI and academic researchers may make

    limited copies of this presentation, electronically or in print, solely for their internal,

    non-commercial use. Any other use of this presentationincluding reproduction for

    purposes other than those noted above, modification, distribution, or

    republicationwithout prior written permission of the Author is strictly prohibited.

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    How Do Your CustomersExperience Your Business?

    Intelligence-basedmarketing

    The company knowswho you are, what

    you prefer, and

    communicates withrelevant, timelymessages, using thepower of analytical

    intelligence to detectpatterns, decode

    strands ofinformation and

    create meaningfuloffers and value

    Schizophrenicmarketing

    The company hasdelusions about whoyou are, forgets what

    you prefer, and tries toreach you with off-

    target communicationsthat alienate you

    based on fragmented

    data & inadequatefaculties, resulting in

    confusing, chaoticmultiple personalities

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    I cant believe it. Ive been a goodcustomer for ten years. And theystill dont get me and the things

    that interest me.

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    Hey! Just because we bought

    Dad a tool set last year doesnot mean we want to see everydrill bit in your inventory.

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    I have 2 million frequentflyers with your airline andstill do not get respect

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    Remember the bad times?

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    I need personal

    attention - help me!

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    Give me

    convenience!

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    Help measap!

    Servicenow!

    Respect me!

    Quality of life!

    Convenience!

    Make it easy!

    Dont embarrass me!

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    The Marketers Task: Understand andCommunicate Successfully With a Multitude

    of Individual Customers Every DayMarketers need the technologypower toolsto gather, analyzeand interpret thousands or millions

    of data strands of customerinteraction detail from countlesstouch points, channels and datasources cracking the DNA codeof each customerand learningover time to communicate andbuild meaningful relationships

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    Who are my most loyal customersand what promotions are mosteffective?

    Do you treat your loyal customersdifferently than your others?

    When a customer touches yourbusiness, do you have thecapability to engage them withtargeted messages?

    How do you determine the level ofpersonalization you give?

    Which of your profitable customersare at risk of leaving?

    What are the buying habits of mybest customers?

    Are you matching products andservices to the right channels?

    Can you detect behavioral eventsand provide timely and relevantcustomer communications?

    Customer Relationships & CRM -More Complex Than Ever Before

    Who are your most valuablecustomers and what are theirattributes?

    What products do my customerspurchase and what do theycrossover purchase?

    What will my customers want next?

    What product promotions increasedsales, transaction size,

    frequency and crossover?

    acquireDo you know what constitutes a

    good customer?

    Are you using customerlifestyle/lifestage data to findprospects?

    Can you match customers to theright products and services?

    Can you use the above knowledgewith your current prospect lists totarget your marketing efforts?

    growthe relationship

    rewardloyalty

    retaincustomers

    Todays marketers have a lot to manage!

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    The Challenge: Find Patterns, DecodeMessages, Turn It All To Business Advantage

    How can a marketer

    Make sense of a tidal waveof interaction detail?

    Serve and satisfy a millionindividual customers?

    Deliver profitable returnson so many relationships?

    Help the business meet itsgoals and objectives?

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    Business Needs & Expectations

    Todays executivesmust justify:

    Every dollar spent

    Every initiative

    And must show:

    The link betweendollars spent, these

    initiatives andreturn on customerrelationships

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    45% of companies areconsidering CRM projects1

    37% have installations

    under way or complete1

    CRM budgets are not beingslashed despite sloweconomy2

    1Source: Forrester Research, 2001

    2Source: Interactive Week, Aug 20, 2001

    Capitalize on CRM Technology

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    Analytical CRM Power ToolsCapabilities that Companies Must Have

    Broad range of actionableanalysis and predictive

    modeling capabilities

    Holistic view of customer

    interactions to understandthe whole customer

    Means to understand and

    automate the event rules that

    drive the business andcommunicate with

    individual customers

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    Manage the Total CommunicationsEnvironment with Analytical CRM

    Direct

    Mail

    E-Mail/Fax

    ATM/Kiosk

    Call Center

    Agent

    Store /Branch

    Analytical CRM

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    What is CRM really trying to do?

    Tactical cultivation of customer relationshipsbased on strategic vision and objectives

    Achieved as a company analyzes and prioritizes opportunities,then communicates with intelligence and relevance to

    individual customers in preferred channels

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    Insight

    Inter-Action

    Timely Messages

    Disk array

    DataWarehouse

    Intelligence

    Operational CRM Systems

    CaptureData

    All Channels All Touchpoints

    ATMInternetExtranet

    E-Mail/Fax

    Sales/Store /Branch

    DirectMail

    KioskAgent/Call

    Center

    Lead With Analytical CRMFor Mission-Critical Intelligence

    ActionAnalytics and Modeling

    Personalize Communication

    Communication Delivery

    Communication Planning

    Customer Optimization

    Relevant Offers

    Timely Messages

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    Percentile Analysis

    Benefits

    Rank and groupcustomers on any keymeasure

    Understand relativecustomer differences

    based on deciles Actively target

    customers directly frocharts & immediatelyinclude them incampaigns

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    Pattern Detection

    Key Benefits Analyzes datapatterns to offerpredictive insight,e.g. what productsdo customers

    typically purchasewith other productsover time?

    Extends marketbasket analysis

    across purchasesover periods of time

    Predicts activityleading up to & aftera significant purchase

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    Response Modeling

    Benefits

    Automatically modelsmost likely respondersfor a communication

    Eliminates guessworkby identifyingsignificant variablesthat affect responsebehavior

    Actively targetcustomer directly fromcharts

    Leverages AnalyticDatasets

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    Benefits

    Build offer,message, discount,and optimizationrules

    Evaluate eachcustomerindividually todetermine the bestcontent to deliver

    Capture andautomate

    marketing IP. Deliver offers

    tailored to eachindividualcustomer.

    Personalization Rules

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    Communication Manager

    Benefits Relevant

    Communication throughright Channel at rightTime

    Flexible campaigndefinition, one-to-oneor mass campaigns

    Multi step, multichannel communication

    Closed loop

    communications

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    Personalization

    6.) Prioritize and

    Optimize mix of

    communications

    deployed to

    channels, may

    use profitabilityscores

    4.) Communication plan

    created. Communications

    approach and offers

    linked to LTV

    campaign.

    1.) LTV Campaign

    model created and

    run to calculate

    campaign scores

    3.) Create

    segments

    according

    to an LTV

    campaign

    model -propensities

    and needs

    7.) Communication

    Plan handed off

    to channel

    systems (e.g.

    Siebel -

    Broadvision)for execution

    8.) Action,

    Response and

    Results

    captured and

    handed back to

    CommunicationManager for

    campaign

    analysis.

    Analysis Modeling

    Communication

    Optimization Interaction

    10.) LTVCampaign

    Responses

    modeled to

    improve

    campaign

    targeting and

    profitability

    11.) LTV

    Campaign

    Results

    Available for

    Analysis viaOLAP Reporting

    by Marketing or

    LOB 9.) Costs of LTV

    Campaign calculated

    based on actual

    channel activity

    5.) Set personalization

    rules to format

    communications

    appropriately for each

    customer.

    2.) Model

    Customer

    Behavior to

    identify life

    cycle events

    Analytical CRM in ActionCustomer Life Time Value Campaign

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    CRM is an ongoing,scientific processnot an isolated campaign

    or marketing plan

    Must create a process for

    achieving the intended ROI

    Note the difference between

    database marketing, sales force

    automation, and CRM To measure CRM success,

    measure the impact of the entire

    process

    Achieve Positive Business Results Over Time

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    Copyright@2001 Teradata, a division of NCR, All Rights Reserved

    570,000 leads, 100 campaigns in 6 mos

    $4.4 billion of new business in six months

    Retention rates of 98.4%

    28.7% increase in profit in six months

    Four continents 15 countries

    $250 BB Australian in assets

    9 million customers

    600 home improvement stores

    $15 BB annual sales

    40,000 products on the shelves

    Triple digit ROI on total DW + CRMinvestment after 4 months = 265%

    High double-digit campaign responses

    Named 2000 NCDM winner for best results

    Generated $1 M in one district in one week

    6,000 leads in 5 weeks and 40%generated a sale or service opportunity

    9 or 10 customer sat on 10pt scale

    Largest retail bank in the world

    4,500 consumer banking centers

    Serving 28 million households

    Market leaders taking the first stepshave proven the CRM business case

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    Your CRM Process Must Balance

    Quality ofCustomerExperiences

    Achieve PositiveBusinessResults